Ozon - Closing Underperform Trade Idea

Following release of the company's 3Q21 results, we close our underperform trade idea on Ozon that we opened on October 26. The idea delivered a 9.2% absolute return and 2.6% return relative to the RTS. The results disclosed by Ozon were quite close to our estimates in terms of revenues and EBITDA loss (adjusted for one-offs), yet the GMV growth outpaced our estimates. As the 3Q21 financial results, which have now been released, were the main catalyst for our trade idea and some indicators (GMV growth, EBITDA as a percentage of GMV) were above our estimates, we close our trade idea and lock in the gains. > Triggers played out, locking in the achieved gains. We highlighted the 3Q21 results as the main trigger for the trade idea. With this catalyst having played out, we prefer to lock in the 9.2% absolute and 2.6% relative return.> Some of the lines were better than we modeled. We also note that though our forecast proved to be correct in terms of Ozon's 3Q21 adjusted EBITDA loss net of one-offs, the company managed to post higher GMV growth, meaning that the EBITDA loss as a percentage of GMV was better than we modeled (though still higher than the consensus estimates). > The management provided a positive outlook during the conference call. In terms of what the management said during the 3Q21 results call, we would highlight the comments related to the positive trend in both 1P and consolidated gross margin next year (not a formal guidance though, yet both better procurement terms driven by higher bargaining power as well as higher advertising revenues should support margin expansion). In advertising, the management stipulated that more than half of Ozon sellers use advertising tools, the engagement is increasing and the ambition is to become a top five player in the online ad market already next year.